-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OvFn+JCnL5GzLKmouqOeH7gvtCV2QYsnw974b4NUqEgC9EWfDkxiDesnyU9C87ib DwczE3NxCOu41knlnMIDTg== 0000899243-97-001817.txt : 19970918 0000899243-97-001817.hdr.sgml : 19970918 ACCESSION NUMBER: 0000899243-97-001817 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970802 FILED AS OF DATE: 19970915 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSHMANS SPORTING GOODS INC CENTRAL INDEX KEY: 0000075043 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 741031691 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11493 FILM NUMBER: 97680440 BUSINESS ADDRESS: STREET 1: 2302 MAXWELL LN CITY: HOUSTON STATE: TX ZIP: 77023-4899 BUSINESS PHONE: 7139283171 MAIL ADDRESS: STREET 1: 2302 MAXWELL LANE STREET 2: 2302 MAXWELL LANE CITY: HOUSTON STATE: TX ZIP: 77023-4899 FORMER COMPANY: FORMER CONFORMED NAME: OSHMANS INC DATE OF NAME CHANGE: 19710603 10-Q 1 FORM 10-Q Form 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 2, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 0-5648 OSHMAN'S SPORTING GOODS, INC. ------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 74-1031691 - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 2302 MAXWELL LANE, HOUSTON, TEXAS 77023 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (713) 928-3171 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NO CHANGE - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common stock, $1.00 par value 5,827,249 --------------------------------- --------- PART I -- FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AUGUST 2, 1997, FEBRUARY 1, 1997 AND AUGUST 3, 1996 (IN THOUSANDS)
AUGUST 2, FEBRUARY 1, AUGUST 3, 1997 1997 1996 ----------- ----------- ----------- (UNAUDITED) (UNAUDITED) ASSETS CURRENT ASSETS CASH AND CASH EQUIVALENTS $ 489 $ 437 $ 361 ACCOUNTS RECEIVABLE, LESS ALLOWANCE OF $225 AUG 97, $225 FEB 97 AND $391 AUG 96 2,970 3,771 2,663 MERCHANDISE INVENTORIES 101,340 107,609 126,629 PREPAID EXPENSES AND OTHER 5,521 4,143 8,042 ----------- ----------- ----------- TOTAL CURRENT ASSETS 110,320 115,960 137,695 PROPERTY, PLANT AND EQUIPMENT, AT COST 92,951 98,446 96,189 LESS ACCUMULATED DEPRECIATION AND AMORTIZATION 49,262 54,073 54,786 ----------- ----------- ----------- NET PROPERTY, PLANT AND EQUIPMENT 43,689 44,373 41,403 OTHER ASSETS 373 401 541 ----------- ----------- ----------- $ 154,382 $ 160,734 $ 179,639 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES CURRENT MATURITIES OF LONG-TERM OBLIGATIONS $ 731 $ 776 $ 882 TRADE ACCOUNTS PAYABLE 39,200 45,704 49,872 ACCRUED LIABILITIES 15,727 18,231 19,843 INCOME TAXES 4,506 4,529 4,365 STORE CLOSING RESERVE 5,116 7,311 278 ----------- ----------- ----------- TOTAL CURRENT LIABILITIES 65,280 76,551 75,240 LONG-TERM OBLIGATIONS 48,707 42,397 46,805 OTHER NONCURRENT LIABILITIES 5,476 5,655 3,566 STOCKHOLDER'S EQUITY COMMON STOCK 5,830 5,830 5,829 ADDITIONAL CAPITAL 4,125 4,068 3,978 RETAINED EARNINGS 24,985 26,254 44,242 LESS TREASURY STOCK, AT COST (21) (21) (21) ----------- ----------- ----------- STOCKHOLDERS' EQUITY 34,919 36,131 54,028 ----------- ----------- ----------- $ 154,382 $ 160,734 $ 179,639 =========== =========== ===========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED AUGUST 2, 1997 AND AUGUST 3, 1996 (UNAUDITED) (in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED 1997 1996 1997 1996 ---------- ---------- ---------- ---------- NET SALES $ 82,913 $ 92,000 $ 171,345 $ 174,720 COST OF GOODS SOLD 54,545 65,647 113,015 118,188 ---------- ---------- ---------- ---------- GROSS PROFIT 28,368 26,353 58,330 56,532 OPERATING EXPENSES SELLING AND ADMINISTRATIVE EXPENSES 29,977 31,307 60,031 60,947 PRE-OPENING EXPENSES 462 1,013 1,010 1,979 STORE CLOSING PROVISION (713) 1,227 (688) 1,324 MISCELLANEOUS INCOME (748) (100) (3,006) (399) ---------- ---------- ---------- ---------- OPERATING INCOME (LOSS) (610) (7,094) 983 (7,319) INTEREST EXPENSE, NET 1,144 913 2,173 1,847 ---------- ---------- ---------- ---------- LOSS BEFORE INCOME TAXES (1,754) (8,007) (1,190) (9,166) INCOME TAXES 56 34 79 96 ---------- ---------- ---------- ---------- NET LOSS $ (1,810) $ (8,041) $ (1,269) $ (9,262) ========== ========== ========== ========== EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE $ (.31) $ (1.38) $ (.22) $ (1.59) ========== ========== ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES $ 5,830 $ 5,828 $ 5,830 $ 5,828 ========== ========== ========== ==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED AUGUST 2, 1997 AND AUGUST 3, 1996 (UNAUDITED) (in thousands)
1997 1996 ---------- ---------- CASH FLOWS OF OPERATING ACTIVITIES: NET LOSS $ (1,269) $ (9,262) ADJUSTMENTS TO RECONCILE NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES: DEPRECIATION AND AMORTIZATION 3,494 3,260 RECOVERIES OF LOSSES ON ACCOUNTS RECEIVABLE - (5) CHARGE TO RESERVE FOR CORPORATE RESTRUCTURING, NET OF DEPRECIATION AND AMORTIZATION (1) (202) CHARGE TO RESERVE FOR STORE CLOSINGS (6,783) - (RECOVERY) PROVISION FOR STORE CLOSINGS, NET (609) 2,329 STOCK OPTION AND BONUS PLAN EXPENSE 57 76 GAIN ON DISPOSITION OF FIXED ASSETS (2,294) (4) AMORTIZATION OF DEFERRED RENTAL ALLOWANCES (179) (118) CHANGES IN ASSETS AND LIABILITIES: DECREASE IN ACCOUNTS RECEIVABLE 801 794 DECREASE (INCREASE) IN MERCHANDISE INVENTORIES 10,945 (15,999) (INCREASE) DECREASE IN PREPAID EXPENSES AND OTHER (1,521) 839 (DECREASE) INCREASE IN TRADE ACCOUNTS PAYABLE (6,504) 14,386 DECREASE IN ACCRUED LIABILITIES (2,503) (632) DECREASE IN INCOME TAXES (23) (17) ---------- ---------- NET CASH USED BY OPERATING ACTIVITIES (6,389) (4,555) CASH FLOWS OF INVESTING ACTIVITIES: PROCEEDS FROM SALE OF FIXED ASSETS 19 26 PURCHASE OF PROPERTY, PLANT AND EQUIPMENT (2,896) (7,682) PROCEEDS FROM DISPOSITION OF REAL ESTATE AND LEASEHOLDS 2,681 1 PROCEEDS FROM NOTE RECEIVABLE 25 24 PROCEEDS FROM LANDLORDS 347 1,979 ---------- ---------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 176 (5,652) CASH FLOWS OF FINANCING ACTIVITIES: PROCEEDS FROM STOCK ISSUANCE - 44 PROCEEDS FROM ISSUANCE OF LONG-TERM OBLIGATIONS - 258 PAYMENTS OF LONG-TERM OBLIGATIONS (423) (423) PROCEEDS FROM REVOLVING CREDIT FACILITY, NET 6,688 10,362 ---------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES 6,265 10,241 NET INCREASE IN CASH AND CASH EQUIVALENTS 52 34 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 437 327 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 489 $ 361 ========== ========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION CASH PAID DURING THE YEAR FOR INCOME TAXES $ 30 $ 98 INTEREST 2,251 1,769
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AUGUST 2, 1997 AND AUGUST 3, 1996 (UNAUDITED) NOTE A The financial statements are condensed and should be read in conjunction with the 1996 annual report. The financial information contained herein is unaudited, but in the opinion of the management of the Company, includes all adjustments (consisting of normal recurring adjustments) for a fair presentation of the results of operations for the periods indicated. The results for the six months ended August 2, 1997 are not necessarily indicative of the results to be expected for the full year. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations The following table sets forth selected statements of operations data of the Company expressed as a percentage of net sales for the periods indicated: PERCENTAGE OF NET SALES ------------------------------ 2ND QUARTER Six Months ------------- --------------- 1997 1996 1997 1996 ---- ---- ---- ---- Net sales 100.0 100.0 100.0 100.0 Cost of goods sold 65.8 71.4 66.0 67.6 ----- ----- ----- ----- Gross profit 34.2 28.6 34.0 32.4 Operating expenses Selling and administrative expenses 36.1 34.0 35.0 34.9 Pre-opening expenses .6 1.1 .6 1.1 Store closing provision (.9) 1.3 (.4) .8 Miscellaneous income (.9) (.1) (1.8) (.2) ----- ----- ----- ----- Operating income (loss) (.7) (7.7) .6 (4.2) Interest expense, net 1.4 1.0 1.3 1.1 ----- ----- ----- ----- Earnings (loss) before income taxes (2.1) (8.7) (.7) (5.3) Income taxes .1 - - - ----- ----- ----- ----- Net earnings (loss) (2.2) (8.7) (.7) (5.3) ===== ===== ===== ===== Net sales for the second quarter of fiscal 1997 decreased 9.9% to $82.9 million compared to $92.0 million in the second quarter of fiscal 1996. The reduction in sales for the quarter is attributable to decreased sales of $14.9 million from stores closed or targeted to be closed and a comparable store sales decrease of 5.1%, or $3.5 million, offset by $9.3 in sales increases from new megastores opened in 1996 and 1997. Net sales for the first six months decreased 1.9% to $171.3 million compared to $174.7 million in the first half of fiscal 1996. The reduction in sales in the first half is attributable to decreased sales of $16.5 million from stores closed or targeted to be closed and a comparable store sales decrease of 5.5%, or $7.2 million, offset by $20.3 in sales increases from new megastores opened since the beginning of fiscal 1996. Management attributes the decline in same store sales to several factors including, the impact of our own liquidation sales in closing stores, particularly in the first quarter of fiscal 1997, lower inventory levels and reduced advertising expenditures. As previously announced, the Company intends to close approximately 53 of its 84 traditional stores in fiscal 1997. At the end of the second quarter of fiscal 1997, 36 traditional stores and one megastore had been closed and an additional six traditional stores were closed by the end of August. The Company expects to end fiscal 1997 with a total of 62 stores in operation, consisting of 36 SuperSports USA megastores, ranging in size from approximately 40,000 to 85,000 square feet, six mini-SuperSports USA stores, ranging in size from approximately 19,000 to 32,000 square feet and 20 traditional sporting goods stores. Cost of goods sold as a percentage of net sales was 65.8% and 66.0% respectively in the quarter and six months ending August 2, 1997 compared to 71.4% and 67.6% respectively in the same periods of fiscal 1996. In the second quarter of fiscal 1997, the Company recorded inventory adjustments (approximately .3% as a percentage of sales) for additional markdowns taken relative to closing stores and certain clearance merchandise. In the second quarter of fiscal 1996, the Company also recorded adjustments to its inventory carrying value (approximately 4.5% as a percentage of sales) related to additional markdowns taken to reduce excessive inventories resulting from lower than planned sales and store closings and to increased physical inventory shrinkage. The reduced rates of cost of goods sold as a percentage of net sales in the second quarter and first six months of fiscal 1997 are primarily due to the nonrecurrence in fiscal 1997 of the significant inventory adjustments recorded in the second quarter of fiscal 1996 and to a reduced level of markdowns as a percentage of sales in fiscal 1997. Selling and administrative expenses as a percentage of net sales were 36.1% and 35.0% respectively for the quarter and six months ended August 2, 1997 compared to 34.0% and 34.9% respectively in the same periods of fiscal 1996. In the second quarter of fiscal 1997, selling and administrative expenses as a percentage of sales in continuing stores increased as a result of lower sales in existing stores as discussed above and due to the impact of new stores that have not yet grown to expected sales levels. In addition, selling and administrative expenses in discontinued stores increased as a percentage of sales as certain of these stores experienced reduced sales volumes during final stages of liquidation. For the first six months of fiscal 1997, selling and administrative expenses as a percentage of sales in continuing stores increased as a result of lower than planned sales, however the increased rate was largely offset by reduced corporate overhead and distribution costs as a percentage of sales and increased sales volumes in discontinued stores during the first quarter of fiscal 1997. The Company has implemented expense reductions at the beginning of fiscal 1997 which are expected to reduce store and overhead costs in fiscal 1997 by approximately $4.0 million. Pre-opening expenses of new SuperSports USA megastores are amortized over the first 12 months of operation. The decline in pre-opening expenses in the second quarter and first six months of fiscal 1997 is related to the reduced number of stores opened in the last 12 months compared to the previous 12 month period. Store closing provision was a benefit of $713,000 and $688,000 respectively in the second quarter and first six months of fiscal 1997 compared to an expense of $1.2 million and $1.3 million respectively in the same periods of fiscal 1996. During the second quarter of fiscal 1997, the Company reevaluated and accordingly reduced its store closing reserves for lease termination costs, leasehold and other asset writeoffs and other incremental store closing costs. In the second quarter of fiscal 1996, the Company recorded a provision of $2.2 million ( 1.0 million of which is related to inventories and is included in cost of goods sold) for stores to be closed in fiscal 1996. Miscellaneous income increased in fiscal 1997 primarily as a result of gains from the sale of leasehold interests of $389,000 in the second quarter and $1.9 million in the first quarter. In addition, in the second quarter of fiscal 1997 the Company recognized a fee related to a new foreign license agreement. The increased interest expense for the second quarter and first six months of fiscal 1997 is primarily related to increased average borrowings in fiscal 1997 and an interest rate increase under the Company's credit facility. Income taxes in fiscal 1997 and 1996 are related primarily to state income taxes. In fiscal 1997, net operating loss carryforwards are anticipated to be realized, resulting in no Federal income tax expense. In the first six months of fiscal 1997, the Company had a pretax loss of $1.2 million compared to a loss of $9.2 million before income taxes in the same period last year. The improved results in fiscal 1997 compared to fiscal 1996 are primarily attributable to (i) the nonreccurence in 1997 of certain inventory adjustments and store closing provisions recorded in the second quarter of 1996 as discussed above, (ii) gains from sale of leasehold interests in fiscal 1997, (iii) reduced operating losses from stores closed in 1997 and 1996 and (iv) the benefit of a reduction of store closing reserves. These improvements were somewhat offset by reduced gross profit contributions from the Company's continuing stores as a result of sales declines as discussed above. Liquidity and Capital Resources In the first six months of fiscal 1997, operating activities used cash totaling $6.4 million. Cash totaling $2.9 million was used primarily for the purchase of property plant and equipment offset by $2.7 in proceeds from the sale of leasehold interests. Financing activities provided $6.3 million through the utilization of the Company's credit facility. Merchandise inventories declined to $101.3 million from $107.6 million at the beginning of the fiscal year primarily as a result of liquidation of inventories in stores closed and targeted to close in fiscal 1997. Additionally, the Company has taken steps to improve inventory turnover rates and reduce average store inventory levels. The Company's continuing stores operated with approximately 10% less inventory in the first six months of fiscal 1997 than during the first six months of fiscal 1996. Additions to property, plant and equipment of $2.9 million during the first six months of fiscal 1997 were related primarily to the opening of a new SuperSports USA megastore in March and two additional megastores which opened in August. The Company expects to open three additional megastores during the balance of fiscal 1997. The Company's primary source of liquidity in the first six months of fiscal 1997 was the Company's credit facility, under which average borrowings were $43.9 million compared to $39.0 million in the first six months of fiscal 1996. Proceeds from the sale of leasehold interests also provided cash of $2.7 million. Long-term obligations increased to $48.7 million from $42.4 million at the beginning of the fiscal 1997 as the Company utilized its credit facility to meet its working capital requirements. The Company believes that its revolving credit facility together with cash provided by operations will be adequate to meet anticipated capital needs for fiscal 1997. The information discussed herein includes "forward-looking statements" within the meaning of the federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company's actual results could differ materially as a result of certain factors, including: the Company's ability to manage its expansion efforts in existing and new markets, availability of suitable new store locations at acceptable terms, levels of discretionary consumer spending, availability of merchandise to meet fluctuating consumer demands, customer response to the Company's merchandise offerings, fluctuating sales margins, increasing competition in sporting goods and apparel retailing, the results of financing efforts and financial market conditions, as well as other factors described from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. PART II -- OTHER INFORMATION ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) June 20, 1997 annual meeting of stockholders (c) Matters voted upon. 1. Election of seven directors to serve as the Board of Directors until the next annual meeting of stockholders and their respective successors are elected. NUMBER OF VOTES ---------------------------------- WITHHELD BROKER NOMINEE FOR AUTHORITY NON-VOTES - ------- --- --------- --------- Marvin Aronowitz 5,174,369 2,350 - Karen Oshman Desenberg 5,174,369 2,350 - William M. Hitchcock 5,174,369 2,350 - Alvin N. Lubetkin 5,174,369 2,350 - Marilyn Oshman 5,174,369 2,350 - Manuel Sanchez, III 5,174,369 2,350 - Dolph B. H. Simon 5,174,369 2,350 - SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act Of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OSHMAN'S SPORTING GOODS, INC. Date: September 15, 1997 By: A. LYNN BOERNER --------------------------------- A. Lynn Boerner Vice-President and Chief Accounting Officer ITEM 6. EXHIBITS Exhibit Index 4.1 Twenty second Amendment Dated August 19, 1997 to the Financing Agreement dated August 31, 1992 between the Company and The CIT Group/Business Credit, Inc. 11.1 Statement Re: Computation of Per Share Earnings 27 Financial Data Schedule EX-4.1 2 TWENTY SECOND AMENDMENT [THE CIT GROUP LOGO appears here] August 19, 1997 As of August 1, 1997 J.S. Oshman and Co., Inc. Oshman Sporting Goods Co., Alabama Oshman Sporting Goods Co., Arizona Oshman Sporting Goods Co., Arkansas Oshman Sporting Goods Co., California Oshman Sporting Goods Co., Colorado Oshman Sporting Goods Co., Florida Oshman Sporting Goods Co., Georgia Oshman Sporting Goods Co., Hawaii Oshman Sporting Goods Co., Kansas Oshman Sporting Goods Co., Louisiana Oshman Sporting Goods Co., Michigan Oshman Sporting Goods Co., Minnesota Oshman Sporting Goods Co., Missouri Oshman Sporting Goods Co., Nevada Oshman Sporting Goods Co., New Jersey Oshman Sporting Goods Co., New Mexico Oshman Sporting Goods Co., New York Oshman Sporting Goods Co., Ohio Oshman Sporting Goods Co., Oklahoma Oshman Sporting Goods Co., Oregon Oshman Sporting Goods Co., South Carolina Oshman Sporting Goods Co., Tennessee Oshman Sporting Goods Co., Texas Oshman Sporting Goods Co., Utah Oshman Sporting Goods Co., Washington Oshman's Ski Skool, Inc. Oshman's Sporting Goods, Inc. - Services 2302 Maxwell Lane Houston, Texas 77023 Gentlemen: We refer to that certain Financing Agreement among each of you (herein collectively called the "Companies") and us, dated August 31, 1992, as supplemented and amended from time to time (herein referred to as the "Agreement"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement. Pursuant to mutual understanding, the Agreement is hereby amended as follows: 1. The definition of "Availability Reserve" set forth in the Agreement shall be, and hereby is, amended and restated in its entirety to read as follows: "Availability Reserve shall mean at any time of determination an amount equal to the sum of (i) the then undrawn amount of all outstanding Letters of Credit, plus (ii) a thirty-two and one-half percent (32.5%) reserve against the cost of inventory located in the traditional stores (i.e., stores other than those having a tradename of "Oshman's Supersports" or "Supersports U.S.A.") scheduled to be closed during the fiscal year 1997, such reserve to remain in place until the liquidation process is complete; plus (iii) the amount of all sales taxes collected by the Companies and not yet remitted to the authority to which such taxes are owed, the amount of which shall be determined by CITBC in its sole discretion." 2. Subpart I of Paragraph 10 of Section 6 of the Agreement is hereby amended by inserting the following under the captions "Fiscal Quarter Ending" and "EBITDA": Fiscal Quarter Ending EBITDA - --------------------------- ---------------------------------------- August 2, 1997 Less than $0.00 November 1, 1997 More negative then negative $2,000,000.00 January 31, 1998 Less than $5,250,000.00 3. The following new paragraph 24 shall be added to the end of Section 6 of the Agreement: "24. The Companies shall, for the fiscal month beginning January 4, 1998 and ending January 31, 1998, maintain, on a consolidated basis, Availability of not less than $8,000,000.00, which shall exclude any amount imposed by CITBC under subclause (iii) of the Availability Reserve, and which Availability shall be computed on the basis of all of the Companies' debts, obligations and accounts payable being current in accordance with the Companies' customary business practices with respect thereto." 4. The word "or" after the roman numeral "xii)" shall be deleted in subparagraph g) of Paragraph 1 in Section 9 of the Agreement, and the following shall be inserted at the end of such subparagraph: "xiii) Paragraph 23 of Section 6, or xix) Paragraph 24 of Section 6;" -2- 5. The following new paragraph 6 shall be added to the end of Section 3 of the Agreement: "6. The Companies also agree that CITBC may enter upon the Companies' premises x) once a year, and y) upon the occurrence of a Default or Event of Default at any time and from time to time, at CITBC's sole discretion, for the purpose of conducting, at the Companies' sole expense, one or more complete physical inventories and/or reappraisals of the Companies' Inventory." In consideration of the use of our in-house staff for the preparation of the foregoing, you, by your signature below, hereby authorize us to immediately charge your account with us a documentation fee of $475.00. Except as otherwise provided herein, no other change in any of the terms or provisions of the Agreement is intended or implied. If the foregoing is in accordance with your understanding, please sign and return to us the enclosed copy of this letter to so indicate. Very truly yours, THE CIT GROUP/BUSINESS CREDIT, INC. By /s/ Pamela Wozniak ---------------------------- Name: Pamela Wozniak Title: AVP -3- Read and Agreed to: J.S. Oshman and Co., Inc. Oshman Sporting Goods Co., Alabama Oshman Sporting Goods Co., Arizona Oshman Sporting Goods Co., Arkansas Oshman Sporting Goods Co., California Oshman Sporting Goods Co., Colorado Oshman Sporting Goods Co., Florida Oshman Sporting Goods Co., Georgia Oshman Sporting Goods Co., Hawaii Oshman Sporting Goods Co., Kansas Oshman Sporting Goods Co., Louisiana Oshman Sporting Goods Co., Michigan Oshman Sporting Goods Co., Minnesota Oshman Sporting Goods Co., Missouri Oshman Sporting Goods Co., Nevada Oshman Sporting Goods Co., New Jersey Oshman Sporting Goods Co., New Mexico Oshman Sporting Goods Co., New York Oshman Sporting Goods Co., Ohio Oshman Sporting Goods Co., Oklahoma Oshman Sporting Goods Co., Oregon Oshman Sporting Goods Co., South Carolina Oshman Sporting Goods Co., Tennessee Oshman Sporting Goods Co., Texas Oshman Sporting Goods Co., Utah Oshman Sporting Goods Co., Washington Oshman's Ski Skool, Inc. Oshman's Sporting Goods, Inc. - Services By /s/ A. Lynn Boerner --------------------------- Name: A. Lynn Boerner Title: VP - CAO of each of the above Companies -4- EX-11.1 3 COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11.1 OSHMAN'S SPORTING GOODS, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE (UNAUDITED) (in thousands, except per share data)
THREE MONTHS ENDED THREE MONTHS ENDED NINE MONTHS ENDED NINE MONTHS ENDED AUGUST 2, 1997 AUGUST 3, 1996 AUGUST 2, 1997 AUGUST 3, 1996 ------------------ ------------------ ----------------- ----------------- FULLY FULLY FULLY FULLY PRIMARY DILUTED PRIMARY DILUTED PRIMARY DILUTED PRIMARY DILUTED ------- -------- ------- ------- ------- ------- -------- ------- NET LOSS $ (1,810) $ (1,810) $ (8,041) $ (8,041) $ (1,269) $ (1,269) $ (9,262) $ (9,262) ======== ======== ======== ======== ======== ======== ======== ======== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 5,830 5,830 5,828 5,828 5,830 5,830 5,828 5,828 EXCESS OF SHARES ISSUABLE UPON EXERCISE OF STOCK OPTIONS OVER SHARES DEEMED RETIRED UNDER THE "TREASURY STOCK" METHOD - - - - - - - - -------- -------- -------- -------- -------- -------- -------- -------- WEIGHTED AVERAGE NUMBER OF COMMON AND DILUTIVE COMMON EQUIVALENT SHARES OUTSTANDING 5,830 5,830 5,828 5,828 5,830 5,830 5,828 5,828 ======== ======== ======== ======== ======== ======== ======== ======== EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE $ (.31) $ (.31) $ (1.38) $ (1.38) $ (.22) $ (.22) $ (1.59) $ (1.59) ======== ======== ======== ======== ======== ======== ======== ========
EX-27 4 FINANCIAL DATA SCHEDULE
5 6-MOS JAN-31-1998 FEB-01-1997 AUG-02-1997 489 0 2,970 0 101,340 110,320 92,951 49,262 154,382 65,280 48,707 0 0 5,830 29,089 154,382 171,345 171,345 113,015 60,031 0 0 2,173 (1,190) 79 (1,269) 0 0 0 (1,269) (.22) (.22)
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